Business Cycles

Recorded at the 2003 Supporters Summit: Prosperty, War, and Depression.

(25:00)

Recorded at the 2003 Supporters Summit: Prosperty, War, and Depression.

(24:29)

Recorded at Mises University 2005.

Recorded at Mises University 2003.

Recorded at the 2003 Supporters Summit: Prosperty, War, and Depression.

(29:32)

Overall economic efficiency does not concern GDP growth per se, writes DW MacKenzie. It concerns the satisfaction of consumer demand. Increased military spending does not directly satisfy consumer demand. Nor do increased deficits and monetary stimulation substitute for market forces. They only set in motion another round of cyclical economic trends.

To help explain the complex analytics behind the Austrian Theory of the Business Cycle, an analogy seems to help. Suppose that, in his 8:00 a.m. class, a student was assigned a paper which is due tomorrow. Of course, he has not yet started working on it. In order to finish the paper on time, he decides to pull an "all-nighter."

To most, the strong housing market has "saved" the economy by providing consumers with fresh purchasing power and housing gains have helped cushion many from the withering blows of the stock market’s decline.

But the housing boom is not an unmitigated good.

Recorded at Mises University 2003.

While one hopes that this current sorry situation does not metastasize into a full-blown calamity reminiscent of the Great Depression, there are some not-so-obvious but important issues that need to be raised if we are to climb out of this economic mess.